Canary in the Coal Mine

2
May

IMG_2347The State of Maryland has been on a unique journey for the last two years as the only state in the nation where healthcare is currently delivered under a population-based budget.  Maryland “promised” the federal government that by the end of 2018, 80% of hospital revenue in the state, for state residents, would shift away from fee-for-service reimbursement.  In return, the federal Medicare program under Centers for Medicare and Medicaid Services (CMS) “agreed to set goals for quality and readmissions and cap the increase in hospital revenues each year for state residents at a growth rate equal to the long-term trend in the states’ economy.”1  In other words, Maryland is operating under a global budget.

With this background music playing, three brave community-based hospital CEO’s, including  Joseph Ross from Meritus Health, Thomas Kleinhanzl from Frederick Regional Health System, and Barry Ronan from Western Maryland Health System, came together to create the Trivergent Health Alliance Management Services Organization (MSO).  This new organization has its core mission to deliver on the objectives of the Triple Aim: namely, to improve the health of the population, to reduce per capita costs, and to improve the individual experience of care.  According to their own materials, Trivergent MSO is to oversee six key service lines, including supply chain, revenue cycle, laboratory, pharmacy, information systems, and human resources.  I believe that Trivergent represents an amazing opportunity, like the “canary in the coal mine,” to test whether capitated payment will really lead us to a new way of delivering population-based services.

IMG_2349The boards of these three hospitals, and of Trivergent, came together at the beautiful Omni Resort in Bedford, PA, where I had the privilege of kicking off this event.  Drawing on their experience as an example, I tried to weave the following story.  These institutions must first reduce unexplained clinical variation and improve the quality and safety of the care they deliver before they can achieve success in a global budget arena.  When they have progressed beyond these tough challenges, they can then engage further with the communities they serve and attempt to successfully implement the Triple Aim.

The board members that I had the privilege of meeting seemed energized by the challenge, as did the physician leaders from all three institutions.  I was impressed by the questions they asked and the dedication they all seemed to share for this joint mission.  They are not merging, they are storming, forming, and norming as they attempt to prove to the federal government that they can perform and make this model work.  Thus far Maryland’s ‘canary’ is alive and well and singing heartily!  We should all pay close attention to the song this bird is singing.

 

 

1. Sharfstein JM, Kinzer D, Colmers JM.  An update on Maryland’s all-payer approach to reforming the delivery of health care.  JAMA Intern Med. 2015;175:(7), 1083-1084.  http://archinte.jamanetwork.com/article.aspx?articleid=2293084 Accessed April 27, 2016.

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